StrictlyVC: May 18, 2015

Hi, welcome back, everyone! Hope you had a terrific weekend.


Top News in the A.M.

Google will reportedly launch buy buttons on its search-result pages in coming weeks, pitting it more directly against online marketplace rivals, including Amazon and eBay.


Uber Exec Tom Fallows on the Company’s Culture, and More

At a StrictlyVC event in San Francisco last week, Tom Fallows, Director of Global Expansion Products at Uber, talked with us about what’s important to Uber right now, why Uber sees the fight for India and China as far from over, and the various ways that Uber and Google differ culturally. (Fallows was hired away from Google late last year. He’d previously spent five years with the search giant, developing, among other things, the Google Express delivery service.)

Fallows couldn’t answer questions about Uber’s funding situation or its reported bid on Nokia’s mapping business, but he was refreshingly forthcoming when answering others. Our chat, edited for length, follows.

Explain what you do.

Obviously, we have the mainline business of offering transportation to people; [my job is largely looking into] how do we expand into new opportunities.  Uber for Business is one of my projects, for example, and that’s just building an enterprise version of Uber so that companies large and small can use it for their business travel.

Is that taking up the majority of your time? How many initiatives are you working on at any one time?

It is taking up the majority of my time. I have six different teams that are working on new projects all the time, and in a healthy ecosystem way, projects that aren’t working get wound down or swallowed up and resources [are] diverted.

Can you point to something that’s been shut down recently?

Nothing since I’ve been [at Uber]. But I remember while at Google, reading about Uber testing a concept [to deliver common convenience store items to select customers through a pilot project] in Washington, D.C that no longer exists.

What can you tell us about how some others of its initiatives — including delivering food and packages — are doing?

I can’t discuss any numbers, but as the press has reported, the Uber Eats [food delivery] product has expanded into several more cities and I think the market has been pretty strong. We’re doing well with Uber Rush, which is a [bike] courier service [that Uber rolled out in New York a year ago].

What do you make of the argument that not everyone wants Uber to deliver both their food and their transportation — that people want different relationships with different brands?

I don’t think consumers inherently care about how their item is getting to them so long as it’s getting to them effectively and quickly.

You founded Google Express. The service has been portrayed in the press as troubled recently, including because the head of Google’s commerce businesses, Sameer Samat, has left to join Jawbone as president. Is that fair?

I can’t speak to recent stuff, but when I left five months or so ago, but it was doing well. I think it’s the wrong conclusion to draw that [Samat’s departure] is a reflection on the commerce business. It’s a big driver of growth, and a big driver of profitability [at Google]. I don’t know anything but I suspect this was a poaching situation.

The problem we had at Google Express was that we didn’t have enough capacity. Like every single delivery and on-demand service out there, we had such product-market fit that we just couldn’t keep up with demand. At Uber, that causes surge pricing. At Shopping Express, that caused sellouts, and that was always the pain point that we were dealing with.

Can you confirm that Uber is currently raising $2 billion more from investors at a $50 billion valuation?

I read about it as you guys did [in the audience]. I have no idea.

If the company were to raise $2 billion, what would its top priorities be?  Expanding domestically? Competing more aggressively in India and China?

I don’t in any way tie this to a fundraising. I literally don’t know anything about it and don’t know if or why we need more money, but the company had said in the last funding round that there are big global opportunities that we’re going after, and in our type of business, for anybody building liquidity and network effect and going into new markets, it can be very expensive.

India and China are obviously big battlegrounds. How do you compete with regional taxi app companies that have something like 99 percent of the market?

China and India are huge potential markets and places where we really want to participate  and where we think we can offer great service. [And] although the alternatives in China are very big, the majority of the business is in the taxi ride hailing, which isn’t a business, it’s purely a matchmaking business. They take no fee whatsoever. They have, similar to us, black car and Uber X [type] businesses, but they aren’t nearly as big, so it’s not . . . an open-and-shut case.

One thing that’s interesting: The transportation business is truly, inherently local. At Google, of course, we could do localization, and we had sales teams in each country, but we didn’t have tech teams or custom features in that many countries, whereas at Uber, you really have to serve every single city independently — even within the U.S. We consider it a strategic advantage, our ability to operationalize at scale the management of these locations that need custom technology and custom solutions.

What are some other differences between these two powerful companies? We know you joined Uber just five months ago, but are there early impressions you can share?

Well, the first, strange [observation I made] when I walked into Uber was that one out of three people is a former Google colleague. There are also lots of people from Facebook.  Top to bottom at Uber, it’s [top-notch employees].

The biggest difference at Uber is that, at heart, it’s still very much a startup with an action bias. In my first couple of weeks, we’d be talking about a new feature and inevitably in that conversation, the question would arise: How long would this take to get out? And someone would say, “I think it’ll be two to three . . .” And in my head, I’d just default, think weeks. And they’d finish, “…days.” And I think, what? [Laughs.]

It’s a combination of a couple things. It’s much younger technology stack. Also, we’ve all had that experience where something needs change and you just change it and 12 minutes later it’s in the world, and Uber is still on that continuum versus my experience at Google, which, I absolutely love the people and I have nothing but great things to say about it, but it’s not necessarily known for its nimbleness and speed. One of the challenges I had with Google Express was how do we launch and iterate in an environment where you have multi-week review cycles, and all for good reason. Everything had a justification behind it. It’s all part of being a big company. But it’s inherently slower.

You get the feeling that nearly everything trickles up to Larry Page at Google. At Uber, whose sign-off do you need?

Very explicitly, the rule inside is: nobody needs to sign off.

(For more of our interview with Fallows, click here.)


New Fundings

Abcodia, a 4.5-year-old, U.K.-based biotech company that has developed an ovarian cancer screening test that it plans to bring to market this summer, has raised $8.2 million in new funding co-led by Cambridge Innovation Capital and Scottish Equity Partners, with participation from earlier backers Albion Ventures and UCL Business.AllSeated, a four-year-old, New York-based maker of event planning and collaboration tools, has raised an undisclosed amount of funding from Magma Venture Partners.

Aliada, a 10-month-old, Mexico City, Mexico-based marketplace that pairs consumers with housekeeping services, has raised $800,000 in seed funding from regional investment firms Capital Invent, Variv Capital, and Dila Capital. TechCrunch has more here.

Cyber adAPT, a year-old, Half Moon Bay, Ca.-based real-time network-based threat detection platform, has raised $4.1 million in Series A funding from Alvin Fund, Granite Point Capital Partners, Griffin Fund II, and Fundamental Capital Management.Decorist, a 2.5-year-old, San Francisco-based online platform that’s aiming to make interior design personal, affordable and easier, has raised $4.5 million in funding from Lowe’s Companies, the Women’s Venture Capital Fund and other angel investors.

Drizly, a three-year-old, Boston-based on-demand alcohol delivery company, has raised $13 million in Series A funding led by Polaris Partners, with participation from First Beverage Group and previous backers, including Suffolk Equity Partners. The company has now raised $17.8 million altogether.

EasyStack, year-old, Beijing, China-based OpenStack startup, has raised $16 million in Series B funding led by RuShan Capital, with participation fromYingDong and earlier backer BlueRun Ventures. The company has raised $18 million to date.

Kapost,  a five-year-old, Boulder, Co.-based content marketing software company, has raised $10.25 million from investors, including Access Venture Partners, Cue Ball Capital, Iron Gate Capital and Salesforce Ventures, as well as earlier backers Lead Edge Capital and High Country Ventures. The company has now raised at least $18.45 million altogether.

Mediabong, a four-year-old, Paris, France-based video syndication network, has raised $5 million in Series B funding from Entrepreneur Venture and Conegliano Venture, among others. The company has now raised $6.3 million altogether, shows Crunchbase.

Omada, a 16-year-old, Copenhagen, Denmark-based maker of compliance management software, has raised $24 million in growth equity funding from C5 Capital, a year-old, London-based firm.

Oyo Rooms, a 2.5-year-old, Bangalore, India-based chain of tech-driven, standardized hotels, is reportedly talking with Softbank about selling a 25 percent to 30 percent stake in its business for $100 million. According to Crunchbase, the company has thus far raised $25.7 million from investors, including Lightspeed Venture PartnersSequoia Capital, and Greenoaks Capital Management. Times of India has the story.

Rovop, a nearly four-year-old, Westhill, U.K.-based company that makes tethered, unmanned underwater vehicles used by the offshore oil and gas and renewables industries to carry out a wide range of tasks, has raised £10m ($15.7 million) in funding from the Business Growth Fund.

ScaleFT, a months-old, San Francisc-based platform for cloud administration and security, has raised $800,000 in seed funding from Rackspace and numerous angel investors. More here.

Telogis, a 14-year-old, Aliso Viejo, Ca.-based maker of fleet management software, has raised $25 million in new funding, according to an SEC filingflagged by Fortune. According to Crunchbase, the company had previously raised $95 million, including from Fontinalis Partners and Kleiner Perkins Caufield & Byers.

Tissue Analytics, a year-old, Baltimore-based wound imaging and telehealth company, has raised $750,000 in seed funding led by the Chinese Internet giantTencent Holdings. TechCrunch has more here.

Taboola, an eight-year-old, New York-based content recommendation startup, has raised an undisclosed amount of “multi-millions” of dollars from Baidu, just three months after Taboola raised $117 million in Series E funding at a  reported valuation of $1 billion. More here.

TrucksFirst, a 10-month-old, Gurgaon, India-based based logistic service provider focused on improving the efficiencies of long-haul trucking in the country, has raised $10 million in Series A  funding from SAIF Partners, with participation from Singapore Post and McKinsey & Co’s Germany-based travel director Thomas Netzer. (TrucksFirst founder Deepak Garg previously spent more than eight years with McKinsey.) Tech-Portal has more here.YCharts, a 5.5-year-old, Chicago and NYC-based financial software company that provides investment research tools, has raised $6 million in Series C funding led by Morningstar, with participation from Reed Elsevier, I2A,Amicus Capital Partners, Hyde Park Angels and other individuals. The company has now raised $14.5 million altogether.


New Funds

Draper Nexus Ventures, a U.S.-Japan cross-border investment firm with offices in San Mateo, Ca., and Tokyo, Japan, has raised $80.3 million for its newest fund, according to an SEC filing that shows a $125 million target. The firm officially kicked off fundraising last September.

Insight Venture Partners, the New York-based growth-stage venture capital and private equity firm, is nearing the close of a pair of funds totaling more than $4 billion, reports VentureWire. Insight Venture Partners IX LP fund has gathered $2.9 billion in commitments, according to a document distributed to investors and viewed by VentureWire. The other fund, Insight Venture Partners Growth-Buyout Coinvestment Fund LP, has reportedly raised about $1.1 billion so far.

Mbloom, a Maui, Hawaii-based venture capital firm focused on startups in Maui and throughout the state, has raised $10 million from a private investor in China, bringing the fund to a total of $20 million, reports Pacific Business News. The fund held a first close on the fund in January 2014 with $5 million raised from Hawaii Strategic Development Corp. and $5 million from an undisclosed private investor.



Coherent Navigation, a seven-year-old, San Mateo, Ca.-based navigation company, has been acquired by Apple, the company confirmed yesterday. Terms of the deal were not disclosed but are expected to bolster Apple’s mapping technology and services. According to the LinkedIn page of Coherent’s CEO, Paul Lego, the acquisition took place five months ago. MacRumors has the story here.

Miaxis Biometrics, a 15-year-old, Hangzhou, China-based developer of biometric software, has been acquired for $40.6 million by the point-of-sale terminal and e-payment solutions provider Xinguodu Technologyreports Reuters.

StrikeAd, a five-year-old, New York-based advertising demand side platform (DSP), has been acquired by the publicly traded ad management platform company Sizmek for undisclosed terms. According to Crunchbase, StrikeAd had raised at least $7 million from investors in a Series A round that included Wavemaker PartnersCanyon Creek CapitalSoftTech VC, and DFJ Esprit.


People< Fan Bao, founder of 11-year-old investment bank China Renaissance, has been involved in some of the country’s biggest IPOs and mergers. Now, his bank is scouring China’s startup scene to uncover a new wave of technology giants. Bloomberg profiles him here.

Seven employees quit payment rewards startup Clinkle simultaneously Friday, reporting owing to frustration with its 24-year-old CEO Lucas Duplan. Indeed, says TechCrunch, the remaining team is “now believed to be less than a dozen, down from 70 several years ago.” The four-year-old company has raised $30 million in funding from investors, including a $25 million round that was boldly advertised at the time as the “largest seed round in Silicon Valley history.”

Longtime LP and now Hamilton College CIO Anne Dinneen on how LPs evaluate venture partnerships.

John and Ann Doerr — both of whom hold bachelor’s and master’s degrees in electrical engineering from Rice University — have donated $50 million to the school to create a leadership institute called the Doerr Institute for New Leaders. The couple has previously donated $15 million to the Rice Center for Engineering Leadership; their newest gift is the largest in the school’s history.

San Francisco attorney Christopher Dolan has agreed to represent a client who says Uber stole his business idea. The evidence is thin, though, and the lawsuit a big gamble for Dolan’s firm, observes The Recorder.

Veterans of Google‘s PR team — including Elliot Schrage,Anne Espiritu, and Rachel Whetstone — now run communications at many of Silicon Valley’s most prominent companies. Forbes takes a looks at what’s become the “farm team for the Valley’s spin machine.”Eric Nuzum, the former vice president of programming for NPR, has joined Amazon-owned as it looks to move further into the world of podcasting, reports GeekWire. Nuzum — who developed some of NPR’s biggest shows, including “Wait, Wait, Don’t Tell Me” —  is joining as senior vice president of original content.

On Friday, Snapchat CEO Evan Spiegel delivered a commencement address at USC’s Marshall School of Business. Among the many pointers he offered the school’s graduates: “You are going to make a lot of mistakes. I’ve already made a ton of them — some of them very publicly — and it will feel terrible, but it will be okay. Just apologize as quickly as you can and pray for forgiveness.” His full commencement speech is here.



Yale is seeking academically inclined founders and investors to teach entrepreneurship on the faculty at Yale SOM. There are two openings.



Sales on e-commerce websites increased 3.5 percent in the first three months of the year from the previous quarter, reaching a record $80 billion worth of purchases, according to Commerce Department figures released Friday and covered by Bloomberg. Year over year, online purchases were up 14.5 percent. Somewhat amazingly, the share of e-commerce as a percent of total retail sales is still just 7 percent, up from 0.6 percent in 1999.


Essential Reads

Axact calls itself Pakistan’s largest software exporter. The New York Times calls it a “fake education empire,” that’s “obscured by proxy Internet services, combative legal tactics and a chronic lack of regulation in Pakistan.”



David Letterman, revolutionary.


Retail Therapy

The Chewbacca hoodie. [Takes helmet by the brim, holds it in the air.]

Filed Under:

Don’t Miss Out!

Sign up today to receive a free daily email with everything you need to start your day. Plus, keep track of the companies and personalities that will shape the industry in the months and years to come. Let StrictlyVC be your very own venture capital concierge.

StrictlyVC on Twitter